Internal consistency of risk free rate and MRP in the CAPM

Tom Hird is a founding Director of CEG’s Australian
operations. In the four years since its inception CEG has
been recognised by Global Competition Review (GCR) as
one of the top 20 worldwide economics consultancies
with focus on competition law. Tom has a Ph.D. in
Economics from Monash University. Tom is also an
Honorary Fellow of the Faculty of Economics at Monash
University and is named by GCR in its list of top
individual competition economists.
Tom’s clients include private businesses and government
agencies. Tom has advised clients on matters pertaining
to: cost modeling, valuation and cost of capital.
In terms of geographical coverage, Tom's clients have
included businesses and government agencies in
Australia, Japan, the UK, France, Belgium, the
Netherlands, New Zealand, Macau, Singapore and the
Philippines. Selected assignments include:
Recent
Advice to Everything Everywhere in relation to the cost of
capital for UK mobile operators – including appeal of
regulators decision.
Expert evidence to the Australian Competition Tribunal
on the cost of debt for Jemena Electricity Networks.
Advice to Integral Energy on optimal capital structure.
Expert evidence to the Australian Competition Tribunal
on the cost of debt for Jemena Gas Networks.
Advice to ActewAGL on estimation of the cost of debt
Advising NSW, ACT and Tasmanian electricity
transmission and distribution businesses on the cost of
capital generally and how to estimate it in the light of the
global financial crisis.
Advice in relation to the appeal by the above businesses
of the AER determination - quoted in Australian
Competition Tribunal decisions.
Expert testimony to the Federal Court of Australia on
alleged errors made by the Australian Competition and
Consumer Commission (ACCC) in estimating the cost of
capital for Telstra.
Advice to T-Mobile (Deutsche Telekom) on the cost of
capital for mobile operators operating in Western
Europe.
Advising Optus and TERRiA on the cost of capital to be
used in developing their tender to build the next
generation fibre to the node (FTTN) broadband network
in Australia.
Advising Vivendi on the correct cost of capital to use in
a discounted cash flow analysis in a damages case being
brought by Deutsche Telekom.
Advising the Energy Networks Association on cost of
capital issues in the context of the Australian Energy
Regulator (AER) five year review of the cost of capital
in the NER.
2007
Advising the Victorian gas distributors in relation to
their response the ESCV’s draft decision on the cost of
capital (four reports).
Advising the Energy Networks Association on the
appropriate estimation technique for the risk free rate
used in CAPM modeling (two reports).
Earlier
Advising the Australian Energy Regulator on the cost
capital issues in relation to the RBP pipeline access
arrangement.
Advising the ENA on the relative merits of
CBASpectrum and Bloomberg’s methodology for
estimating the debt margin for long dated low rated
corporate bonds.
Advising the Australian Competition and Consumer
Commission, Australia on the correct discount rate to
use when valuing future expenditure streams on gas
pipelines.
Tom Hird | Director | C E G
| T: + +61 3 9505 3828| M: 0422 720 929
| E: tom.hird@ceg-ap.com